In today's marketplace, the consumer goods industry has seen a significant shift in the way it does business, primarily as a result of the Internet and electronic commerce. With traditional grocery items moving to large retail discount stores, such as Wal-Mart™ or Super K Center™, nation-wide supermarket chains, warehouse clubs and even boutique/specialty type food stores (organic, gourmet items), not only do consumers have more choices as to what products to choose, but also where to shop from. Accordingly, customer retention becomes top priority for these retailers. The focus to keep shelves well stocked, maintain a variety of product selections and offer a wide array of promotion incentives, has altered the manner in which the retailer and the manufacturer do business. The need to directly address front-end efforts and improve communication between the manufacturer (supply side trading partner) and retailer (demand side trading partner) is now of critical importance to doing business and keeping a known presence in this competitive market.
As evidenced in the past few years, electronic commerce, essentially business-to-business communication and processes have stepped up to the plate to answer this call. One mode of such communication is through electronic data interchange (EDI), which is data comprised of transaction sets, transmitted either through third party services or Value-Added Networks (VANs). Essentially, EDI facilitates the direct feed of data from computer to computer—transmitting transactions into vendors' databases which in turn feed to ordering, accounts payable systems. The EDI transaction sets are the necessary formats or templates specific to a purchase order, invoice, advance ship notice, product registration and the like. While this direct exchange of transaction sets is inviting, there are complexities associated with its use that have implicating cost factors as well. Essentially each manufacturer and retailer has its own applications and independent computer systems, each with requisite standards for accepting data. To utilize EDI, numerous interfaces must be developed to link the information to the particular sending or receiving-end party's software applications and computer systems. The software designed to support and develop such interfaces alone are costly. And in the instance of the Value Added Networks (VANs) which accommodate for such interfaces and parlay that information for the subscribing customer, these too can be cost prohibitive as higher transaction fees are assessed on each end of the line. Transaction fees rapidly accumulate as fees are charged when a message sent, received, re-sent with additional information, and approved or rejected.
With the emergence of the Internet, more progress has been made with respect to collaboration on the web. As an alternative mode of communication, the focus has moved to an Extensible Markup Language (XML)-based standard which allows the same fundamental communication of data as offered by EDI, however at a lesser cost. In addition, to further facilitate web-based transactions, the consumer goods industry has also turned to a standards-based organization in an effort to synchronize information and provide guidelines and protocols for all trading partners to communicate. Here, the standards-based organization amasses the information and works with a panel of industry representatives to set forth the required fields, or basic information, and exchange protocols which it deems essential in the consumer goods transaction process beginning with a new item's publication, its pricing, and following through to its associated trade-promotions. By having a standards-based format for the structure of the data and fields of information, supply side and demand side trading partners are readily able to communicate valid and essential information, which in turn can be passed through to their respective applications and integrated to their own Enterprise Resource Planning (ERP) or legacy systems.
Where the above process stops short is that this basic or standardized data is not the only mission-critical data that is required to complete a collaborative transaction. In the example of publishing an item, price, or promotion across the Internet, the only elements transmitted may be the Global Transaction Identification Number (GTIN), Item name, Price, Deal Rate, UPC code, First Order and Shipment Dates, Last Order and Shipment Dates, Performance Dates, the dimensions and qualifications of the Unit of Measure. The other mission-critical data in these transactions are extended data attributes, as to the product, price, or the promotion's more specific qualities, which is also required by the trading partners to facilitate a complete transaction. Although each trading partner may have different expectations of such data depending on the account, the category of the product, the extended attributes can be generally described as any other supplemental information which facilitates the transaction. It is only with the inclusion of this extended data that truly allows a true machine-to-machine transaction. Otherwise, it is necessary for the trading partner to employ raw labor to define and populate such extended data to accommodate the complete transaction.
The uniqueness of this extended data is not new. The consumer goods industry has traditionally run its business, both on the retail and manufacturer's side through printed contracts or trade forms for promotions. Like most paper-driven processes, these forms were extremely thorough with extensive detail from the product description, size, dates, pricing, merchandising activity, and payment thereof. However, obviously, with its static form it had to be routed through various departments, keyed into different systems, all the while subject to human error. Numerous techniques, including the presence of EDI, Consortia Exchanges, and the Internet with XML-based messaging have vastly improved the former paper process; however, the specifics of the industry and particulars of each retail account still dictate how business is conducted. While standards have been created to facilitate this electronically, and exchanges and catalog databases maintain the various item requisites, there still remains a void with respect to this relevant data the retailer needs to feed to its own legacy system to keep its operations running on a machine-to-machine basis.
As noted above, it is understood that each demand side trading partner will have different extended data attributes required for items, pricing and promotion. Without such a method to accommodate both electronic standard item attributes as well as extended data, machine-to-machine transactions without input from human hands is impossible. Because there are no universally agreed or standard default extended data attributes, it is important these fields are created by the respective retailer as defined by their business practice and/or item category specifications. What is considered of importance in selling chemical-based house cleaners, such as the “Flash Point” (the lowest temperature at which vapor or volatile liquid will ignite when heated under standard conditions) is different from the extended data requisite for frozen pizzas, essentially the “Freezer Temperature” to indicate the proper degrees for maintaining freezer cases when shipping and warehousing the item.
As data is moved through the trading partner's respective application and fed into a main ERP or legacy system, this type of supplemental information becomes critical to the retailer's distribution center's supply chain and warehouse operations. A retailer may even wish to have a requisite field for the name of the Factory Contact as part of the transaction. The retailer needs to establish these types of unique inquiries as an extension of the standards-based transaction. In turn, the manufacturer needs to be able to receive these requirements and input the requisite information to keep the transaction process moving. In order to more efficiently address and close the loop in introducing and distributing a new product the retailer and manufacturer must have the ability to communicate extended data attributes in addition to the standard item attributes.
The same instance prevails with an item's pricing. Standards-based data allows for only one price per unit of measure (e.g. $15 per case; $100 per 100 pounds). However, dependent upon the contract arrangement each retailer may have with the manufacturer, this structured price may be subject to additional discounts by volume, or other specific information as referenced within their individual contract terms such as additional National rates, a specific contract-agreed rate, or even reference to the expiration date of the contract. Items such as these and others would be pertinent extended data for the retailer.
The consumer goods industry revolves around the practice of using promotions to move merchandise. Specifically, a promotion may be defined as the culmination of allowances offered by a manufacturer in order to encourage retailers to buy a certain product(s) within a specified time period. Although planned and initiated by the supply side, it is essentially the input from the retailer dictates the terms of the promotion. When a promotion is planned, many terms are considered, most obvious is the shipment and performance dates of the promotion event, the various merchandising activity to be used, such as a display, gondola end aisle, a “Sunday Supplement” advertisement, a radio or television ad, an in-store flier, or tie-in to a coupon, frequent scanner card, and others. Also relevant is how the retailer is to be paid for performing such promotion, essentially will this offer be in the form of a dollar amount deducted off the product invoice, “off-invoice,” or will a fee be charged and billed back to the manufacturer for the amount sold, “bill back.” Additionally the retail account may be paid separately for such merchandising activities in the form of a lump sum payment.
Continuing the process, the same need for extended data can be applied to the communication of trade promotions. While discernable information as to performance dates, ship dates, allowance information and the type of merchandising activity planned resident in the standards-based message, other elements such as the designated fund for the promotion, or multiple merchandising and allowance information is absent. Again, these types of extended data attributes are specific to each retailer, and unless the supply side is aware of such sidebar information, promotion deals and incentives would be lost as a result of incomplete data communication. Retailer A may not be able to accept a “Spring Cleaning” promotion for a furniture wax item from Manufacturer B without additional information concerning the designated fund to select for the merchandising activity, or the National Deal it may be tied to, or the Minimal Weekly Sales required.
In order to address the unique parameters of each retailer's operations, extended data attributes about the product, price and promotion must be relayed and tied back into the overall transaction. At present, with most EDI or standards-based XML messages, this information is either not carried through and must be input manually, or it is passed through to a separate database application wherein the data is removed from the context of the original transaction and cannot be matched to the appropriate legacy or ERP system. From the above, it is seen that an improved system for creating and transmitting extended item attributes to product items, pricing and trade promotion transactions is highly required in order to facilitate machine-to-machine collaborative communication without requiring additional dual entry of data at one side of the machine or the other.